Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: The European Parliament is sent to freeze ratification of its
Speaker 2: US trade deal, the block demanding clarity after President Trump's
Speaker 2: new fifteen percent tariff.
Speaker 1: The move follows the Supreme Court.
Speaker 2: Ruling limiting his emergency powers. You leaders say approval can't
Speaker 2: move forward mid growing trade uncertainty. Let's stay on tariffs.
Speaker 2: And I'm joined now by Missouri Representative Jason Smith, who
Speaker 2: also serves as the chairman of the House Ways and
Speaker 2: Means Committee, and he is the chief tax writer in Congress.
Speaker 2: Chairman Smith, thank you so much for joining us this morning.
Speaker 2: Let's start with the elephant in the room. The tariffs
Speaker 2: were a big source of fiscal revenue for twenty twenty five.
Speaker 2: Do you anticipate that that all will get refunded, and
Speaker 2: if not all, much of it will get refunded.
Speaker 3: Now, to say that the tariffs were a significant impact
Speaker 3: of revenue is to say it lightly. In fact, it
Speaker 3: has been projected by the Congressional Budget Office that the
Speaker 3: tariffs that were in place would reduce the national deficit
Speaker 3: by three trillion dollars, and.
Speaker 1: That's pretty substantial.
Speaker 3: However, the Supreme Court decision is not going to affect
Speaker 3: the revenue that's coming in for the most part, because under.
Speaker 1: A lot of the Federal Trade.
Speaker 3: Statutes in regards to unfair trade, whether it's Section one,
Speaker 3: twenty two, three oh one, or two thirty two, the
Speaker 3: President is going to be able to levy his authority
Speaker 3: to implement virtually the same tariffs that were in place
Speaker 3: under IEPA that the Supreme Court throughout.
Speaker 2: Sure, but the tariffs that were implemented through IEPA. Representative Smith,
Speaker 2: is it your message maybe to Corporate America that if
Speaker 2: they've joined this lawsuit, that maybe they shouldn't be expecting
Speaker 2: the tariff free funds? How do you expect that to
Speaker 2: play out?
Speaker 3: You know, it's really unfortunate that the Supreme Court was
Speaker 3: crickets when it came to their very large, their large opinion,
Speaker 3: but they didn't even address this. So of course now
Speaker 3: it's going to be reprimanded down to the lower courts.
Speaker 3: They will make those decisions, but it's going to.
Speaker 1: Be a process.
Speaker 3: It's going to take three to four years probably before
Speaker 3: it's addressed.
Speaker 2: There is this question of uncertainty that's certainly one of them.
Speaker 2: Chairman Smith, what's going to happen with the refunds. But
Speaker 2: then there's this other lingering uncertainty of having a president
Speaker 2: who first announced is ten percent tariffs and then fifteen
Speaker 2: percent with Section one twenty two, which can only be
Speaker 2: in place for a limited number of days. How is
Speaker 2: this helping uncertainty in corporate America? Do you think that
Speaker 2: there could have been an argument to just say, Okay,
Speaker 2: the Supreme Court has made its decision and we carry
Speaker 2: on as is.
Speaker 3: You know, certainty is great for the economy. That's why
Speaker 3: we passed the big, beautiful bill, the Working Families Tax Cut,
Speaker 3: six months early, to give this certainty to those small businesses,
Speaker 3: those big companies. But in regards to the tariffs, I
Speaker 3: think it's very certain there's probably not going to be
Speaker 3: any refunds. I don't see a pathway in Congress that
Speaker 3: there's going to be refunds. And so you're going to
Speaker 3: look at over so course of the President Trump's administration,
Speaker 3: he's going to continue to use those tariff revenues to
Speaker 3: bring down the deficit.
Speaker 2: There is another matter to this, though, and it can
Speaker 2: easily and many people have framed this as simply a
Speaker 2: consumer price hike. Representative Smith, do you expect that all
Speaker 2: of the Republicans in Congress will be behind this when
Speaker 2: we're just three and a half months away from a
Speaker 2: midterm election where affordability is on the ticket.
Speaker 3: I think it's very important to understand trade policy just
Speaker 3: as a whole of where it is with all Americans,
Speaker 3: but also all members of Congress and the United States Senate.
Speaker 3: It's a deeply divided issue. Whether you're Republican or whether
Speaker 3: you're Democrat. There's not a uniform opinion of one party.
Speaker 3: In fact, you have Democrats that agree with Republicans, and
Speaker 3: Republicans agree with Democrats on various aspects of whether they're
Speaker 3: pro tariffs or they're anti tariffs. So if something moves
Speaker 3: forward from a legislative perspective, it will have to be
Speaker 3: bipartisan because it is such a bipartisan division when it
Speaker 3: comes to those different items. But let's look at what
Speaker 3: tariffs have done. We have the lowest trade deficits since
Speaker 3: two thousand and nine, and when you refund tariffs, you're
Speaker 3: refunding money to corporations that benefit by purchasing products outside
Speaker 3: of the United States. Who benefited from tariffs was the
Speaker 3: US manufacturers and US farmers.
Speaker 2: So to be clear, are you and your colleagues working
Speaker 2: on legislation right now to codify tariffs.
Speaker 3: We've been working on trade legislation throughout my three years
Speaker 3: as Chairman of the Ways and Means. If you if
Speaker 3: you just look at most recently in the last month,
Speaker 3: we reinstituted and extended the Haiti and the Gooa trade
Speaker 3: preferences programs. So we're in the middle of all the
Speaker 3: different trading aspects. If you look at the Big Beautiful Bill,
Speaker 3: we addressed a minimus when it came to China and
Speaker 3: other packages coming in the United States.
Speaker 1: We're going to continue to do so. Tariffs are not.
Speaker 2: The debt is still exploding because in large part the
Speaker 2: one big Beautiful Bill, Representative Smith, are we done cutting
Speaker 2: the deficit? Is this it for now?
Speaker 1: We can't be done cutting the deficit.
Speaker 3: When you look at a national security threat, it's definitely
Speaker 3: our fiscal house. When you're looking at approaching forty trillion
Speaker 3: dollars in national debt, we have to be looking at
Speaker 3: ways to trim the budget twenty four to seven.
Speaker 2: So are you then, with all of this disappointed in
Speaker 2: a lot of your Republican colleagues. There have been some
Speaker 2: Senator Paul Representative Bacon, who publicly applauded the Supreme Court ruling.
Speaker 2: Representative Smith, it doesn't seem like there's cohesion at this moment.
Speaker 3: Well, Senator Paul didn't vote for the Big Beautiful Bill either.
Speaker 3: So there's always division within the Republican Party. But guess what,
Speaker 3: there's bigger division in the Democrat Party Because Hakeem Jeffries
Speaker 3: is not even the minority leader of the House. His
Speaker 3: lip base affects all of his policies A decisions. That's
Speaker 3: why we're in a government shutdown right now with the
Speaker 3: Department of Homeland Security and why they're not funding TSA
Speaker 3: agents in the airport, why they're not funding FEMA, and
Speaker 3: why they're not funding the US Coast Guard.
Speaker 2: Yeah, there's a lot of backlash this weekend about a
Speaker 2: brief decision to shut down TSA pre check. Chairman Smith,
Speaker 2: where do we stand on funding the Department of Homeland Security?
Speaker 1: Is there any movement?
Speaker 3: There has been zero movement from what I have seen.
Speaker 3: The Democrats are demanding unrealistic expectations and solutions. They're the
Speaker 3: ones who shut down government. They need to come back
Speaker 3: to the table and make sure those TSA agents, the Coastguard,
Speaker 3: the Secret Service, FEMA that they have paychecks.
Speaker 2: There still has been just mass outrage about what's happening
Speaker 2: with immigration and with ICE. Representative Smith, Where would anyone
Speaker 2: budge on this? How does it come to a solution?
Speaker 3: Well, what doesn't make sense is that they say they
Speaker 3: want to defund ICE, but guess what. ICE was funded
Speaker 3: for four years in the One Big Beautiful Bill.
Speaker 1: So by shutting down.
Speaker 3: The Department of Homeland Security budget that does not affect
Speaker 3: funding of ICE. ICE is continuing to be funded because
Speaker 3: we did it for four years. So it is absolutely
Speaker 3: only politics of why the Democrats are shutting down government.
Speaker 3: They say that they're doing to defund ICE, but they
Speaker 3: know that they're not defunding ICE by shutting down.
Speaker 2: Pro Some of the polls, though, have moved in the
Speaker 2: wrong direction for this administration on things the President ran
Speaker 2: on immigration, on this economy, on affordability again, three and
Speaker 2: a half months away from the midterms. Is this an
Speaker 2: administration and a party a GOP that risks losing control
Speaker 2: of the narrative.
Speaker 3: Anyone can find a poll that favors their narrative, There's
Speaker 3: no question about it. What I will say is is
Speaker 3: I was back home in my Congressional district. All last
Speaker 3: week traveling throughout my twenty eight counties, and people were
Speaker 3: very portive of the President's immigration policies and securing the border,
Speaker 3: and the fact that three million people have illegals have
Speaker 3: been deported or voluntarily left.
Speaker 2: I still think some of the images coming out have
Speaker 2: shocked people. But all this said, Representative Smith, there are
Speaker 2: a lot of issues that this administration now needs to tackle,
Speaker 2: especially in light of Friday's ruling. What are you expecting
Speaker 2: for the president State of the Union address tomorrow?
Speaker 3: I think the President's going to highlight what he's done
Speaker 3: in his first year in office, which I believe what
Speaker 3: President Trump has done in his first year of office
Speaker 3: is more than what most presidents do in eight years,
Speaker 3: when you look at securing the border, which we just discussed,
Speaker 3: creating the largest tax cut in US history, and fulfilling
Speaker 3: his campaign promises of no tax on tips, no tax
Speaker 3: on overtime, tax relief for seniors, increasing the child tax credit,
Speaker 3: creating the Trump Investment Accounts, making one hundred percent expensing
Speaker 3: of new factories. You've seen more than ten trillion dollars
Speaker 3: of investment come back into the United States. We have
Speaker 3: the lowest interest rate in five years, the lowest gas
Speaker 3: prices in five years, and guess what, the murder rate
Speaker 3: in the United States is the lowest since nineteen hundred.
Speaker 3: These are huge successes. But when you look on the
Speaker 3: foreign stage, the president has eliminated eight different conflicts, so
Speaker 3: I think that's a lot of success that some presidents
Speaker 3: would be begging for, although.
Speaker 2: There might be another conflicts brewing with a run or
Speaker 2: at least an escalation, which also might un do some
Speaker 2: of the work in gas and oil prices. Representative Smith,
Speaker 2: we're going to have to leave it there. Thank you
Speaker 2: for joining us. Representative Jason Smith, Chairman of the House
Speaker 2: Ways and Means Committee,